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Council scrutiny report found ‘dishonourable culture’ and aggressive overpricing among housing contractors

Hackney Council has defended the management of its £246m of housing contracts after a probe revealed aggressive pricing, excessive claims for works, and a “dishonourable culture” amongst contractors.

The probe, a two-year old internal review from a council scrutiny commission which has recently come to light, found that “stark examples of poor behaviour” had become apparent between contractors which the council employs to carry out work on homes and estates.

Some contractors under-priced at the tendering stage and then overpriced during the contract’s lifecycle, whilst others falsely claimed work was completed and delivered poor-quality jobs, according to the ‘Living in Hackney’ scrutiny commission.

The report highlighted one job in particular which was subcontracted out and is under criminal investigation following allegations of money laundering and bribery after “substantial over-claiming” for fire safety work.

Hackney Council said it welcomed the report and the recommendations made by the councillors, but assured that officers mentioned in the report had acted quickly, proportionately and effectively to counter them.

The authority also downplayed the scope of the review, which it said focuses on one old specific partnering contract that has since ended, whilst the council currently manages around 70 construction-related contracts at any one time, amounting to around £100m of work annually.

The council said its procurement team have dedicated resources to help construction contracts to deal with the inevitable challenges in managing large and complex contracts, and that external expertise will be sought where needed.

In response, Hackney has also moved a number of contracts for housing back in-house and Clayeon McKenzie, cabinet member for housing services, said she was confident residents will see even greater improvements to homes and estates.

McKenzie was questioned last week about last summer’s restructure after it came to light that electrical specialist Morgan Sindall had completed just 24% of the 1,452 repairs it should have done under its £810,000 contract.

Many jobs had to be redone because of the poor quality, and the council spent considerable time training up a whole new project management team because the first team simply weren’t adequate.

The firm was also found to be guilty of “aggressive pricing”, which saw claiming for greater amounts of work than appropriate and double charging by claiming for works that had already been invoiced for.

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